Nichirin Co., Ltd. Business Report FY2011

Business Highlights

Financial Overview

(in millions of JPY)
  FY2011 FY2010 Rate of Change(%) Factors
Sales 33,463 36,298 (7.8) 1)

Operating income 754 1,686 (55.3)
Ordinary income 682 1,690 (59.6)
Net income 64 880 (92.7)

- Sales decreased year-on-year, due mainly to a 50 percent fall in demand from Japanese automakers during April and May in the aftermath of the great earthquake, as well as decreased business following the heavy flooding in Thailand in October.
- The company posted a loss from the rising value of the yen, which remained high.

North America
- The Company suffered falling sales and a loss from the impact of the supply chain interruptions after the earthquake in Japan and the flooding in Thailand, as well as the appreciation of the yen.

- Sales and profit decreased from the previous year due to delays in parts deliveries from Japanese companies after the great earthquake.

- Sales and profit increased from last year, thanks to the strong ASEAN economy. Production and sales launch at PT. Nichirin Indonesia (established in April) in October also contributed to the improvements.   

- Sales and profit dropped from last year because of the impact of the earthquake in Japan and the weakening European economy.

Business Outside Japan

Nichirin Co., Ltd. announced that it will establish a subsidiary in Indonesia in April 2011. The new company, which will be tentatively called P.T. Nichirin Indonesia, will manufacture and sell automotive hoses in West Java Province, starting in July 2012. The 3.2 million USD entity will be fully invested by Nichirin. In April 2010, Nichirin signed a basic agreement to establish a joint venture company in the country with P.T. Mitrametal Perkasa (Mitra) of Indonesia. The two companies, however, have yet to reach a final agreement on the joint project. Nichirin is intending to turn Nichirin Indonesia into a joint venture with Mitra upon signing the final agreement. (From a press release on February 17, 2011)

Nichirin Co., Ltd. announced that it will sign a joint venture agreement with PT. Mitrametal Perkasa (Mitra) of Indonesia in June 2011. In April 2011, Nichirin established a wholly-owned subsidiary named PT. Nichirin Indonesia in Indonesia. Mitra has agreed to operate Nichirin Indonesia as a joint venture in which Nichirin will own 51 percent and Mitra will own 49 percent. Nichirin Indonesia manufactures and sells automotive hose and tube products. (From a press release on May 12, 2011)

Joint Venture

- On June 21, 2011, the Company and Mitrametal Perkasa (Mitra) of Indonesia signed a contract to establish a joint-venture business. Mitra has agreed to invest 49 percent in Nichirin Indonesia, which is currently owned 100 percent by Nichirin, to collaborate in the automotive hose and tube business in the country.

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D Expenditure

(in millions of JPY)
  FY2011 FY2010 FY2009
Overall 794 844 816

Technology Licensed-out

(As of Dec. 31, 2011)

Company Country Content of Contract Period of Contract
From To
HS R&A South Korea Manufacturing technology for air conditioner hoses used in automobiles Feb. 24, 2010 Mar. 4, 2013
Manufacturing technology for automotive brake hoses Mar. 3, 2010 Mar. 4, 2013
Manufacturing technology for automotive power steering hoses Jan. 1, 2010 Dec. 31, 2011

New Product Development

Automotive hoses
- The Company developed hydraulic brake hoses and hoses for antiskid brake systems for new customers overseas. These products will be installed on new vehicles coming to the market after 2012.
- The Company's car air conditioning hoses were chosen for installation on the HFO1234yf system, a replacement for the HFC134a fluorocarbon refrigerant contributing to global warming.  
- The Company's low permeability fuel hoses, which passed the U.S. EPA's emissions regulations, are already being supplied to customers. These products will be also sold in ASEAN countries as well, starting in FY2012.

Investment Activities

Capital Expenditure

(in millions of JPY)
Japan 516
North America 105
China 161
Asia 328
Europe 11
Total investment 1,121

New Investment Plan

(As of Dec. 31, 2011)
Name of Company/Plant Location Equipment Estimated amount of Investment
(in millions of yen)
Project Period
From  To 
PT.Nichirin Indonesia Karawang,
New plant building 137 Sep. 2011 Mar. 2012
Production of automotive hoses 155 Sep. 2011 Apr. 2012